July 13, 2019
The way I understand it, Moses went up a mountain and God gave him two stone tablets consisting of Ten Commandments. On those two stones was the Law. Do this. Don't do that. Amazingly, those few words seemed to work and folks lived their lives by figuring out which of the 10 do's and don'ts they had (or had not) broken. Many years later, someone apparently had far too much time on his hands and figured we ought to tinker with the majestic simplicity of the whole two tablets and ten commandments thing. That resulted in the promulgation of Deuteronomy, which means the "Second Law," or, as modern lawyers would likely phrase it, the "Restatement of Law." What previously took two stones and 10 commandments, mushrooms in Deuteronomy in the form of Chapters 12 - 26. In offering a more up-to-date guidance as to the Ten Commandments, we expanded to 15 chapters. Clearly, Deuteronomy marks the beginning of bureaucracy. Over the ensuing millennia, we have expanded upon the original two stone tablets and gone way beyond the restatement of Deuteronomy. Title 18 of the United States Code is man's effort to promulgate a criminal code and the attendant criminal rules of procedure. At last glance, Title 18 ended with Chapter 601, and with Section 6005. Anyone have any idea how many stone tablets it would take to enter 6005 sections of law?
In her recent speech before the American Enterprise Institute, SEC Commissioner Hester Peirce bemoaned the labeling of public companies on so-called ESG issues (i.e., environmental, social and governance). Peirce told her audience that uptight social activists are now forcing corporations to wear ESG labels the same way Hester Prynne, the heroine of Nathaniel Hawthorne's The Scarlet Letter, was forced to wear her scarlet letter "A." Hester the Commissioner argues that it is unfair for corporations to be subjected to such public "shaming" as it was for Hester the Adulterer. Except, Hester the Commissioner misstates the point of the novel. So . . . let's get the novel right.
An Edward Jones stockbroker met with a customer and they agreed to reduce risk and increase income via portfolio rebalancing. Within a month of the rebalancing and after the stockbroker had departed the firm, the customer seemed to have complained that the trades were unauthorized. In response, Edward Jones cancelled the trades and the customer's complaint was noted on the former stockbroker's industry record. About a year after the busted trades, the stockbroker filed an arbitration against his former employer in an effort to expunge the purported customer complaint. What ensues is a tribute to both the FINRA Arbitrator deciding the case and the stockbroker's lawyer.
I need to borrow some money. An old family friend said he's ready to make the loan. I'll put it in a promissory note. He's more than happy to help me out. Unfortunately, my employer broker-dealer only allows for loans from family members. The friend's not a family member. Now what?
In today's blog we come across yet another Small FINRA Member Firm running afoul of the self-regulatory-organization's rules. It's another one of those woulda, coulda, shoulda matters in which FINRA has the firm dead to rights. Our publisher, Bill Singer, doesn't argue the point; however, Bill does use this case as an opportunity to take FINRA to task for playing hide-and-seek with some "BS".